M.H.

ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

EXECUTIVE SUMMARY
The internship was carried out in MH Alshaya, a Middle east based retail
and franchising company. The project was allotted in the logistics
department, group freight division. The internship was carried out in 4
project areas.
1. Freight Conversion
2. Group Freight Dashboard
3. Shipping Guide

1. Freight conversion
The project was part of cost cutting initiatives promoted by the top
management as a counter measure against economic decline. The
logistics department wanted to use marine freight instead of air freight
for transporting consignments from different supplier countries like
United Kingdom, China, India, Pakistan, Bangladesh, Singapore, UAE,
Hong Kong, Brazil, United States etc. to different gulf countries like
UAE, Kuwait, KSA, Bahrain, Qatar, Egypt, Lebanon Morocco etc.
The freight consisted of finished consumer goods e.g. Apparel and
furniture, semi-finished products e.g. Food items and miscellaneous
products like shop fittings, non-stock items eg. Hanger, tags, pallets
etc. and documents e.g. Brochure
There were 4 major brands selected by the division to carry out the
project for
1. Mothercare
2. River Island
3. Next
4. Aurora
The scope of the projects:
1. Propose most cost effective and adaptable supply models using
marine freight
2. Evaluate proposed models in terms of cost benefit and lead time
increase
3. Identify challenges and supply chain implications for different
models
4. Develop roadmap for implementation
The current scenario was analysed and freight volumes were simulated
for proposed models to find out the cost savings.
Estimated savings from freight conversion were calculated around $ 3
Million for all 4 brands ie. Approximately 65% cost reduction.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

The project involved dealing with 3PL, shipping teams, brand teams
and clearance agents. It was required to recommend changes in
inventory control measures and replenishment techniques that will suit
the lead time impact in proposed models

2. Reporting Dashboard.
Logistics department deals with multiple supply partners, these supply
partners need to be aligned with the planning of top management and
must perform with required standard.
The different supply partners under consideration are
1. Third party logistics
2. Custom clearance agents
3. Third party warehouses
4. Finance team
5. Shipping teams
It was required by top management to take decisions regarding these
partners and activities performed by them, to correctly assess their
performance KPIs were needed to be updated and presented in a
manner that compares them within different dimensions to provide a
thorough but precise picture of group freight activities and spending.
It was also required that the performance and freight spent to be
compared with industry averages to ease benchmarking and ensure
that best practices are being effective to enhance the efficiency of the
supply network
Objective
To design a dashboard that provides:
A. Top view of logistics activities
B. Freight spent
C. To increase the visibility of performance of different stakeholders of
logistics department
Scope:
A. To identify and understand the primary freight activities that have
direct impact on freight performance.
B. Understand the data available on such activities and design KPIs
C. Design freight spent metrices that separate out opportunities and
threat for freight department
D. Design a dynamic layout for representing all the KPIs , Metrics ,
charts to the executives
-The project was part of top management decision making strategy,
it was to be used as an aide for top management in following areas
A. Gauging performance of supply chain partners in the areas that
directlt impact the supply chain capability in terms of
responsiveness and cost effectiveness.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

B. To track the progress of initiatives that were taken by top

management
C. To understand logistics spent of the organization in multiple
dimensions of mode, 3PL, market, brands, year etc.
D. To detect early signs of failure in supply networks allowing top
management to be pro-active in problem solving

3. Shipping Guide
Group freight division have 550+ staff that carry out day to day
operations of shipping, the knowledge base of this staff is limited and
no formal training is available to ensure that they are educated
centrally and their working is aligned with each other as well as best
practices followed in Industry
Objective

To study the shipping activities that are part of Alshaya logistics

and evaluate them to find out the best practices.
Design a guide to educate floor staff about the shipping process
technicalities and adapting to best practices.
Scope
It was required to study and improve all the activities from
supplier yard to local distribution centre that can effect the
supply chain progress
Apart from Alshaya staff, 3PL on site agents activities were also
included so that their reports and inputs are in standard format
that can be easily understood by shipping staff

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

COMPANY BACKGROUND
Overview
As one of the most dynamic and successful retailers in the region,
Alshaya Retail franchises some of the world's best known brands,
making them flourish in new markets, from the Middle East and North
Africa to Russia, Turkey and Europe.
Alshaya operates across a uniquely wide range of sectors, offering
consumers the latest and best recognised names in Fashion &
Footwear, Food, Health & Beauty, Pharmacy, Optics, Home Furnishings
and Leisure & Entertainment.
With brands such as Starbucks, H&M, Mothercare, Debenhams,
American Eagle Outfitters, P.F. Chang's, The Cheesecake Factory,
Victoria's Secret, Boots, Pottery Barn and KidZania, our multi-brand,
multi-market franchise portfolio brings leading retail concepts to local
malls and high streets and ensures the delivery of a truly international
shopping experience.
With unparalleled regional expertise and marketing knowledge,
Alshaya's dynamic performance has been driven by continuous
investment in talent, infrastructure, operational excellence, and by our
ambition to be a world-leading retailer. Through a spirit of trust, cooperation and best practice, we continue to build long-lasting,
professional and mutually profitable business partnerships.
The breadth of portfolio, understanding of business and consumer
needs, and ability to deliver integrated development plans at pace key
competencies of the company.
History
Alshaya Retail is part of the wider group of businesses owned by the
Alshaya Group, a family-owned business which was founded in Kuwait
in 1890 and which has become a byword for trading and commerce,
both in the Middle East and internationally.
Between the 1960s and 1970s the group expanded substantially and
today owns a portfolio of businesses in real estate, construction,
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

hotels, automotive and general trading, as well as expanding into new

markets.
Alshaya Retail, trading as M.H. Alshaya Co., started its first
international franchise relationship in 1983 with the opening of our first
Mothercare store, and we have grown at a significant pace throughout
our history. Today we employ over 44,000 people, we have more than
70 brand partnerships, and we operate over 2,800 stores across the
Middle East and North Africa, Russia, Turkey and Europe.
Our wide geographical spread is supported by experienced
management teams, high operational standards, sophisticated
infrastructure, and ongoing investment in management information
systems and logistics.
While Alshaya Retail operates at a global scale, we never forget our
history, family heritage and values. In our early days we understood
that great service and living up to our promises was critical to our
business, and we hold those values dear today.
Foresight, energy and a passion to be the best drive us to explore new
opportunities and to build strong and effective business partnerships
built on trust, integrity and mutual benefit.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Management
Alshaya's retail division is organised to support the mutual needs of
our business and those of our brand partners. Our management
structure is based on internationally recognised models whilst
allowing for cultural adaptability and regional flexibility.
Under the guidance and leadership of our Executive Chairman, the
business is led by our Chief Executive Officer. Each of the brands
within Alshaya sits within one of seven business units: Fashion &
Footwear, Food, Health & Beauty, Pharmacy, Optics, Home
Furnishings and Leisure & Entertainment. Each brand is led by a Vice
President or Business Director. Ultimate brand responsibility and P&L
accountability sits with business unit Presidents who report directly
to the CEO.
Each brand has its own team, structured to the individual needs and
scale of that business but typically including Business Directors,
Brand Managers and Operations Managers. These teams are
responsible for delivering the business proposition in keeping with
the franchise partner framework, and in line with Alshaya's retail
strategy.
Regional Managing Directors, reporting to the Chief Operating
Officer, support our individual operating regions: the Middle East
and North Africa, Russia, Turkey and Europe. Local country teams in
our markets ensure that operations are appropriately managed in
line with local infrastructure.

Cross-border functional teams for HR, Finance, Legal, Property,

Supply Chain, Audit, IT and Customer Service provide specialist
support and consistency of reporting in key areas. Whilst structures
vary by region, a focus on common policies, metrics and reporting
systems provide an enterprise-wide perspective of performance.
We recognise that the skills of our people are a major asset and play
a key role in the success of our business. In a market with dynamic
socioeconomic demographics, our scale and performance trackrecord allows us to attract top talent, and we are proud of the
breadth of expertise that exists within Alshaya Retail. We work hard
to build and maintain a reputation as 'Employer of Choice', ensuring
that our expertise translates into best practice and that our people
development integrates these learnings.

Markets
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

With more than 2,800 stores in prime locations we operate more

than 70 retail brands, including many of the world's best
international brands all carefully chosen to bring the highest quality
products to discerning, multi-cultural populations. Our operating
markets currently cover the Middle East and North Africa, Russia,
Turkey and Europe.

We continue to grow and we continue to explore new ideas, new

markets and new opportunities.

Infrastructure
Our 2,800 stores are the engine of our business. Timely supply and resupply keep our stores fresh and ensure customer satisfaction. This is
essential in a dynamic sector where buying habits, markets and trends
can change almost overnight.

At Alshaya we have created a flexible and robust infrastructure that

can effectively manage the complex product mix we sell - from apparel
and cosmetics to furniture and food - and which can support our retail
outlets at speed.

Our dedicated brand merchandisers are focused on getting the right

product to each store, and our automated systems ensure that our
fastest selling lines are continually replenished.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Our global network of Regional Distribution Centres are our primary

logistics and warehousing hubs, and we operate Local Distribution
Centres in each local market that provides the right environment and
capacity to fulfill our growing requirements. Integrated systems support
effective stock management across our store and warehousing
network.

Centrally we support all areas of our retail and logistics operations. At

the close of each trading day, all sales figures and stock movements
are downloaded to business units and to our partners via our secure,
dedicated IT systems which are ISO/IEC 27001 certified. Careful
analysis allows the correct trading and planning decisions to be taken
for each individual brand. EPOS technology is installed in every outlet
we operate, and an online communications network supports the rapid
transfer of information around the business.

Our brands have dedicated management teams to service their specific

requirements, and country teams are in place to drive consistent
operational standards. Specialist teams at the centre, such as IT, Real
Estate and Supply Chain, provide best in class functional support
services and ensure best practice and market insight is shared.

Rigorous strategic planning, strong financial resources and high

standards of financial control and management are central to our
business approach. Our centralised finance and treasury functions are
operated to international IFRS standards, and we are audited annually
by globally recognised accountants and advisers. This helps to ensure
that every element of our retail operation is managed to the highest
calibre.
Alshaya's first international franchise business, trading as M.H. Alshaya,
was established in 1983 with the opening of our first Mothercare store
in Kuwait. Here's a brief overview about the company.

Facts & Figures

We are part of the Alshaya Group of companies, a family business
established in 1890.
Our Executive Chairman is Mohammed Abdul Aziz Alshaya, part of the
third generation of the family business.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

We manage over 70 brands, bringing the best international names to

new consumers.
Our 2,800 stores occupy over 9.9 million sq ft / 935,000 sq m of retail
space and we continue to grow at pace.
We operate across the Middle East and North Africa, Russia, Turkey and
Europe.
We employ more than 44,000 people from over 110 nationalities.
We make over 500 million transactions and serve over 160 million
guests in our stores, cafs and restaurants.
We operate across diverse customer sectors - Fashion & Footwear,
Food, Health & Beauty, Optics, Pharmacy, Home Furnishings and
Leisure & Entertainment.

NEED FOR THE PROJECT

1. Freight Conversion
MH Alshaya spends around $ 15 Million on logistics. The logistics
cost is around 12% of cost of goods sold, The freight cost as
percentage of goods is as high as 80% for some brands.
The need for project can be classified in following categories
1. Economical
The declining global economic condition have resulted in
declining sales pattern over the year. Currently retail sector is
enjoying a high mark up in middle east because of low or no tax
regime but because of decreasing purchasing power the retail
companies have to sacrifice their mark ups to stabilize the sales.
To retain the bottom line that the company has been enjoying
there is a dire need of reducing operational expenses. Logistics is
the largest expense which accounts for around 15 % of expenses.
The company mostly uses air freight and have minimal
dependence on road and marine freight. The marine freight cost
is usually 10-15% of air freight costs. Thus converting to marine
freight is the powerhouse of cost savings.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

The conversion poses a lots of uncertainties and require changes

in supply network and processes. The project aims at creating the
roadmap for marine freight conversion.
2. Opportunity
The central logistics department was established five years ago
and have a key agenda of centralizing the logistics activities of
more than 70 brands
The logistics department have visibility of supply chain of 70
brands and can utilize economy of scales to move economical
volumes and minimize freight cost.
The marine freight is highly economical mode of transportation,
in most of the historical cases it was observed to result in cost
savings of more than 80% when compared with air freight.

Freight Cost- 20 PLT std shipment

6000
5000
Freight Cost20 PLT std
shipment

4000
3000
2000
1000
0
Air

Marine

Because of establishment of central logistics divisions the

possibility of consolidating material of different brands as one
had surfaced, this not only increases the per shipment volume
thus allowing marine freight easier but also makes the freight in
higher volume bracket which is cheaper
22
Pallet
shipment
Origin charges
Freight
charges
Destination
charges
Demurrage
charges
Storage
Charges
Total charges
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1 Shipment

5 Shipments

522
750

832
998

10
Shipments
1543
1290

323

534

678

231

189

193

27

15

13

1853

2568

3617

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE
* All figures in USD

# data from

actual test shipment conducted

These two factors means that a very high cost savings can be
achieved if we use marine freight and consolidate material from different
brands, these two possibilities makes the project a major force for cost
saving plan of group freight division

2. Group Freight Dashboard

The top management need to carry out the decisions that must be backed
with actual dynamics of activities going in group freight
Current reports that represent freight activities are 32 page reports
without any standard protocols and lack of quality in the KPIs and Metrics;
these KPIs misrepresent the data because of no measure to show the data
dependency, thus representing the cause effect relationship.
In case the top management need to represent such data to stakeholders,
the numbers are useless as other teams are not aware of the meaning of
the same.
There is a need to be proactive by detecting early signs of failure, current
reports do not effectively point out activities that may be in jeopardy.
Thus a brief but precise dashboard is required to satisfy following that is
required by top management.
ILLUSTRATION
Following page shows transit time in road freight for different 3PLs, the
KPIs do not show any volume consideration.
The gree part shows satisfactory performance and red shows problem are

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Problems:
3PL which is not performing well can be shown in green region if number
of shipments were lower in that month
The KPIs don not compare performance with respect to previous month,
previous year or YTD, thus do not allow us to track trends

A. The performance of different stakeholders of supply chain e.g.

3PL, Clearance agents, Shipping teams, Finance department etc.
make the supply chain inefficient and unnecessarily complex.
There is a need to identify a method to evaluate the
performances of such stakeholders and represent them to top
management to make better decisions for selecting supply chain
partners and identify focus points for improvements
B. Top management must be able to see early signs of failures and
opportunities for improvement of supply chain to make an
efficient supply chain.
C. There is a need for summarizing large quantity of logistics data in
a 2 page report that top management can have on their
fingertips
D. Having an in-house reporting will allow management to challenge
performance claims propagated by supply chain partners.
E. There must be some indicators and indexes that can be
communicated to brands so that the brands can easily
understand their freight expenses and grasp the initiatives
suggested by logistics department.
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Apart from solving problems at group freight division, the dashboard

will help following to understand their logistics footprint better:
1.
2.
3.
4.
5.
6.

Brand teams
Shipping staff
3PLs
Custom clearance agent
Finance team
COO

3. Shipping Guide
Logistics division have 550+ staff that carries out ground level
activities. These activities are:
1. Packaging
2. Pallet loading
3. Container loading
4. LCL/FCL decision
5. Documentation
6. Warehouse storage and retrieval
These are the ground level activities that directly impact supply
chain performance, because of lack of centralized training these
activities are carried out inefficiently in a misaligned manner
A literature is required that can be used to educate staff about
best practices that will be followed throughout the supply
network.
Shipping guide aims at solving following:
A. The management is aware that the shipping team is not able to
use best practices of shipping because of lack of communication
and education among shipping staff. The guide will help the
shipping teams to carry out freight activities efficiently.
B. To align the activities by standardizing shipping activities
C. Various tools will be provided to shipping staff that will aide in
increasing efficiency of freight activities

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

OBJECTIVES OF THE PROJECT

Following are the objectives of the project as stated by the project sponsor
The scope of the project changed in between as the implementation went
on
1. Freight Conversion
A. To propose feasible supply networks with marine freight
dominance for different brands
B. To find out the cost savings as a result of proposed models and
supply chain implications of these models e.g. Lead Time Impact
C. Point out the challenges, risks, opportunities, advantages and
disadvantages associated with the proposed models
D. Identify the changes required in supply chain management e.g
Inventory management techniques, order cycle, inventory
classification and other changes in process and documentation
2. Group Freight Dashboard
A. To design a standard reporting dashboard representing
performance delivered by stakeholders in various freight
activities, that will work as a decision making tool for top
management and enable them to identify opportunities and
observe early signs of failure
B. To identify KPIs for various freight activities and metrics for
freight costs.
3. Shipping guide
A. To make a guide for the shipping staff to educate them about
best practices that must be followed for shipping in most cost
effective manner
B. To design a freight cost calculator tool that will enable user to
calculate freight cost for different routes, 3PL and modes and
allow the user to compare freight cost in different combination of
shipments and volumes.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

LITERATURE REVIEW
1. Freight Conversion
The freight is transported through air, marine and land routes. The
marine routes are very economical and usually 80% cheaper than
air freight but have a massive impact on lead times. In fashion retail
lead times are pivotal, to reduce cost and minimize impact on lead
times, supply routes are studied in detail. The data is provided by
3PLs in their rate cards.
2. 3PL Third Party Logistics
The logistics activities are outsourced to Logistics Company eg. DHL,
Aramax, Allport, DB Schenkers, Agility etc. The 3PLs work under SLA
and charges according to Rate cards provided by them
3. Rate Card
The rate cards are provided by the 3PL during contract and charges
all freight activities according to the same. 3PL provide the records
of all charges corresponding to individual shipments in their
shipment trackers
4. Shipping Trackers
Data provided by 3PL that contain details of shipments e.g. date,
volume, weight, costs associated, delivery day etc.
5. Clearance Agent
To clear the customs in international freight, the custom clearance
activities are outsourced to other.
6. LTL/FTL
Less Than truckload The Company do not rent the whole truck but
only transports small quantity. The LTL shipment is charged
according to volume.
Full Truck Load - The Company hires the whole truck and 3PL
charges as a complete truck
7. LCL/FCL
Less than container load and full container load
8. Chargeable Weight
3PLs charges according to chargeable weight which is the greater
one of volumetric weight or actual weight.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

9. Consolidation
Combining material from different location as one consignment to
ship more economically.
10.
Cross Docking
Quick pick up and dispatch of material without any storage in
warehouse.
11.
FOB
Logistics from supplier yard to origin port
12.
Group Freight Dashboard
KPI: Key Performance Indicators
Indicators that gives us one number to gauge the performance of
stakeholder in key areas that are critical to successful operations
Important KPIs in MH Alshaya logistics
1. Air KPI: Door to Yard Lead time
2. Marine KPI: Transit time port to port
3. Road KPI: Transit Time
4. PO closing performance
5. Invoice closing performance
6. D/O Handover time
Metrics
Important measures that are key to understand freight activities
1. Freight Cost per Unit
2. Freight cost as percentage of Costs of goods sold
3. Mode optimization
4. Route economy
13.

Shipping Guide

Carton: The basic unit of packing

Pallet: Cartons are loaded on pallets 20 cartons per paller
Types of pallets
1. Euro Pallet
2. Industrial Pallet
3. US pallet
4. Asian Pallet

Container
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Marine freight is carried in containers

Types of containers:
1. 20 feet Standard
2. 40 feet Standard
3. 40 feet High Cube
4. 40 feet Reefer
FCL/LCL Decision
To decide weather to use full container or send as an LCL shipment
Break Even Volume: The volume below which its more efficient to
use LCL shipment

A maximal-space algorithm for the container loading problem

Step 0: Initialization

L={C}, the set of empty maximal-spaces.

B = {b1, b2, . . . , bm}, the set of types of boxes still to be packed.
qi = ni (number of boxes of type i to be packed).
P = ;, the set of boxes already packed.
Step 1: Choosing the maximal-space in L
We have a list L of empty maximal-spaces. These spaces are called maximal
because at each step they are the largest empty parallelepiped
that can be considered for filling with rectangular boxes. We can see an example
for a 2D problem in Figure 2. Initially we have an empty rectangle and when we
cut a piece at its bottom left corner, two maximal spaces are generated. These
spaces do not have to be disjoint. In the
same Figure 2 we see two more steps of the filling process with the maximalspaces generated.
Working with maximal-spaces has two main advantages. First, we do not have to
decide which disjoint spaces to generate, and then we do not need to combine
disjoint spaces into new ones in order to accommodate more boxes. We
represent a maximal-space by the vertices with minimum and maximum
coordinates.
To choose a maximal-space, a measure of its distance to the containers corners
is used. For every two points in R3, a = (x1, y1, z1) and b = (x2, y2, z2), we
define the distance d(a, b) as the vector of components
|x1 x2|, |y1 y2| and |z1 z2| ordered in non-decreasing order. For instance,
if a = (3, 3, 2) and b = (0, 5, 10), d(a, b) = (2, 3, 8), resulting from ordering the
differences 3, 2, 8 in non-decreasing order. For each new maximal-space, we
compute the distance from every corner of the space to the corner of the
container nearest to it and keep the minimum distance in the lexicographical
order.
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NATIONAL INSTITUTE
OF INDUSTRIAL ENGINEERING
d(S) = min{d(a, c), a vertex of S, c vertex of container C}
For instance, if we have the maximal-space S1 = {(4, 4, 2), (6, 6, 10)} in a
(10,10,10) container, the corner of S1 nearest to a corner of the container is
(6,6,10) and the distance to that corner is d(S1) = (0, 4, 4). At each step we take
the maximal-space with the minimum distance to a corner of the container and
use the volume of the space as a tiebreaker.
If we have a second maximal-space S2 = {(1, 1, 2), (4, 4, 9)}, we have dist(S1) =
(0, 4, 4) and dist(S2) = (1, 1, 1). From among these spaces we would choose
space S1 to be filled with boxes. At each step, the chosen space will be denoted
by S. The corner of the maximal-space with the lowest distance to a corner of
the container will be the corner in which the boxes will be packed. The reason
behind that decision is to first fill the corners of the container, then its sides and
finally the inner space.
Step 2: Choosing the boxes to pack
Once a maximal-space S has been chosen, we consider the types of boxes i of
B fitting into S in order to choose which one to pack. If qi > 1, we consider the
possibility of packing a column or a layer, that is, packing several copies of the
box arranged in rows and columns, such that the number of boxes in the block
does not exceed qi. In Figures 3 and 4 we can see different possibilities for
packing a box type i with

Maximal-spaces in two dimensions

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NATIONAL INSTITUTE
OF INDUSTRIAL ENGINEERING
qi = 12. Figure shows alternatives for packing a column of boxes, while in Figure
4 we consider different ways of packing a layer with this box type. If some
rotations of the pieces are allowed, the corresponding configurations will be
considered.

Figure 3: Three different alternatives for a

column
Two criteria have been considered to select the configuration of boxes:
The block of boxes producing the largest increase in the objective function. This
is a greedy criterion in which the space is filled with

Figure 4: Six different alternatives for a layer

the block producing the largest increase in the volume occupied by boxes.
ii The block of boxes which fits best into the maximal-space. We compute the
distance from each side of the block to each side of the maximal-space and order
these distances in a vector in non decreasing order. The block is chosen using
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NATIONAL INSTITUTE
OF INDUSTRIAL ENGINEERING
again the lexicographical order. We can see an example in Figure 5, in which we
consider several alternatives for filling an empty space of (20, 20, 10). The
block (a) completely fills the space and its distance is (0,0,0); the block (b)
completely fills one side of the space and its distance is (0,0,9); for the block (c),
only its height matches the space height and its distance is (0,2,7); finally, none
of the dimensions of block (d) matches the space dimensions and its distance is
(2,2,3).
For both criteria, ties are broken by choosing the configuration with the minimum
number of boxes. In Section 4 we test both criteria and make a decision about
which one will be used in the final implementation. After choosing a block with ri
boxes, we update P with the type i and the number of boxes packed and set qi =
qi ri. If qi = 0, we remove piece i from the list B.
Step 3: Updating the list L
Unless the block fits into space S exactly, packing the block produces

Figure 5: Best fit of the empty space

new empty maximal-spaces, which will replace S in the list L. Moreover, as the
maximal-spaces are not disjoint, the block being packed can intersect with other
maximal-spaces which will have to be reduced.
Therefore, we have to update the list L. Once the new spaces have been added
and some of the existing ones modified, we check the list and eliminate possible
inclusions. For the sake of simplicity, Figure 2 illustrates this process for a twodimensional problem. When the second box is packed in maximal-space 2, this
space is eliminated from the list and is replaced by two new spaces 3 and 4.
When the third piece is packed into maximal-space 4, as it is completely filled it
just disappears, but spaces 1 and 3 are also partially filled and must be reduced,
producing spaces 5 and 6.

Cross-docking
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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

The crossdocking is used when the material needs to be transported to

other location without storing it in warehouse.
There is consolidation or deconsolidation carried out at warehouse and the
material is shipped without going to warehouse storage unit.

Cross Docking

FCL/LCL Decision
Factors to consider when sending marine shipment
21 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

LCL lets you keep inventory low

If you dont have the money or space to accommodate a full container at
your warehouse, it makes sense to use LCL. LCL lets you ship in smaller
volumes so that you can keep your inventory lean. Instead of purchasing
large quantities from suppliers, you can use LCL to keep a steady flow of
inventory in smaller quantities. That frees up cash flow for other
purchases.

FCL is cheaper than LCL

LCL costs more than FCL per unit of freight. Thats because freight agents
prefer a full container load rather than to figure out how to bundle many
LCL shipments in a full container. In addition, many importing fees are
fixed, which means that you have to pay them regardless of how large
your container is.

FCL gets delivered more quickly than LCL

When an FCL shipment arrives at port, its unloaded from the vessel and
delivered to the buyer. Its more complicated for LCL: someone has to
consolidate different shipments, process multiple documents per
container, and then sort goods for each customer. Every point could be
delayed. At origin, the cargo has to be grouped together to fill a container.
At destination, theres a greater risk of examination by customs: When
one shipment in a container gets flagged, every shipment has to be
checked. That can cause delays of days.

LCL increases risk of damaged goods

If you ship LCL, you have no control over the cargo that will be loaded in
the same container as your goods. There could be more dangerous
objects traveling in the same container, like liquids, heavy weights, smelly
objects, etc. Instead of knowing exactly whats going into a container, you
have to prepare for the risk that your shipment will be damaged. In
addition, given the additional complexity of going to multiple places,
theres a greater risk that your cargo gets misplaced or lost.
If youre able to structure shipments together into an FCL without having
too high of inventory costs, it probably makes more sense to ship FCL.

Performing root cause analysis

22 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Root Cause Analysis (RCA) is a popular and often-used technique that

helps people answer the question of why the problem occurred in the first
place. It seeks to identify the origin of a problem using a specific set of
steps, with associated tools, to find the primary cause of the problem, so
that you can:
Determine what happened.
Determine why it happened.
Figure out what to do to reduce the likelihood that it will happen again.
RCA assumes that systems and events are interrelated. An action in one
area triggers an action in another, and another, and so on. By tracing back
these actions, you can discover where the problem started and how it
grew into the symptom you're now facing.
You'll usually find three basic types of causes:
Physical causes Tangible, material items failed in some way (for
example, a car's brakes stopped working).
Human causes People did something wrong, or did not do something
that was needed. Human causes typically lead to physical causes (for
example, no one filled the brake fluid, which led to the brakes failing).
Organizational causes A system, process, or policy that people use to
make decisions or do their work is faulty (for example, no one person was
responsible for vehicle maintenance, and everyone assumed someone
else had filled the brake fluid).
RCA looks at all three types of causes. It involves investigating the
patterns of negative effects, finding hidden flaws in the system, and
discovering specific actions that contributed to the problem. This often
means that RCA reveals more than one root cause.
You can apply RCA to almost any situation. Determining how far to go in
your investigation requires good judgment and common sense.
Theoretically, you could continue to trace root causes back to the Stone
Age, but the effort would serve no useful purpose. Be careful to
understand when you've found a significant cause that can, in fact, be
changed.

The Root Cause Analysis Process

Step One: Define the Problem
What do you see happening?
What are the specific symptoms?
Step Two: Collect Data
23 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

What proof do you have that the problem exists?

How long has the problem existed?
What is the impact of the problem?
You need to analyze a situation fully before you can move on to look at
factors that contributed to the problem. To maximize the effectiveness of
your RCA, get together everyone experts and front line staff who
understands the situation. People who are most familiar with the problem
can help lead you to a better understanding of the issues
Step Three: Identify Possible Causal Factors
What sequence of events leads to the problem?
What conditions allow the problem to occur?
What other problems surround the occurrence of the central problem?
During this stage, identify as many causal factors as possible. Too often,
people identify one or two factors and then stop, but that's not sufficient.
With RCA, you don't want to simply treat the most obvious causes you
want to dig deeper.
Use these tools to help identify causal factors:
Appreciation

Use the facts and ask "So what?" to determine all the

possible consequences of a fact.

5 Whys
Drill Down

Ask "Why?" until you get to the root of the problem.

Break down a problem into small, detailed parts to better

understand the big picture.

Cause and Effect Diagrams

Create a chart of all of the possible

causal factors, to see where the trouble may have begun.

Step Four: Identify the Root Cause(s)
Why does the causal factor exist?
What is the real reason the problem occurred?
Use the same tools you used to identify the causal factors (in Step Three)
to look at the roots of each factor. These tools are designed to encourage
you to dig deeper at each level of cause and effect.
Step Five: Recommend and Implement Solutions
What can you do to prevent the problem from happening again?
How will the solution be implemented?
24 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Who will be responsible for it?

What are the risks of implementing the solution?
Analyze your cause-and-effect process, and identify the changes needed
for various systems. It's also important that you plan ahead to predict the
effects of your solution. This way, you can spot potential failures before
they happen.
One way of doing this is to use Failure Mode and Effects Analysis (FMEA).
This tool builds on the idea of risk analysis to identify points where a
solution could fail. FMEA is also a great system to implement across your
organization; the more systems and processes that use FMEA at the start,
the less likely you are to have problems that need RCA in the future.
Impact Analysis

is another useful tool here. This helps you explore

possible positive and negative consequences of a change on different

parts of a system or organization.
Another

great

strategy

to

adopt

is Kaizen

or

continuous

improvement. This is the idea that continual small changes create better
systems overall. Kaizen also emphasizes that the people closest to a
process should identify places for improvement. Again, with Kaizen alive
and well in your company, the root causes of problems can be identified
and resolved quickly and effectively.

Key Points
Root Cause Analysis is a useful process for understanding and solving a
problem.
Figure out what negative events are occurring. Then, look at the complex
systems around those problems, and identify key points of failure. Finally,
determine solutions to address those key points, or root causes.
You can use many tools to support your RCA process. Cause and Effect
Diagrams
and 5 Whys
are integral to the process itself,
while FMEA

and Kaizen

help minimize the need for RCA in the

future.
As an analytical tool, RCA is an essential way to perform a comprehensive,
system-wide review of significant problems as well as the events and
factors leading to them.

25 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

METHODOLOGY
1. Freight Conversion
Project requirement:
To design supply networks for multiple brands according to the
requirements specified by individual brand or director, Logistics
The process followed to design supply network was as follow
U n d erstan d
su p p ly
n e tw o rk to
u n d erstan d
rou tes

Prop o se
A lte rn a te
m od e ls

S im ulate
M od e ls

Fin d co st
sa vin gs,
im p lica tio
ns.

1. Understand Supply Network & Routes: consult with 3PLs to

understand the routes and identify potential routes and their fit
for the marine freight model
2. Propose Alternate models: Propose different supply models
which have different offerings in terms of cost savings,
challenges, lead time impact and complexity so that brand can

26 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

select the suitable model according to their requirement at

different times and for different products.
The proposed supply models may work simultaneously for
different product categories
3. Simulate Models: Use tracker data and rate cards provided by
3PL to simulate new supply model on historical volumes,
comparing actual lead times and freight costs with simulated one
to find out dynamics of each proposed model.
4. Find Cost savings & Implications: Consult with the
stakeholders to
A. Identify the problems they will face in implementing proposed
model.
B. Extra costs they might incur in proposed model
C. Changes that they may need to adapt in new model
All the above factors were considered to calculate final cost savings.
Challenges, Problems and process changes were acknowledged in making
implementation roadmap.

The first project focussed on understanding various cost

associated with feight
Second project was related to design of entire supply
network
Third project dealt with managing origin activities to rive
cost savings

The brands and requirement are as follow:

1. Mothercare: Ex-UAE 100% Air to Ex-UK 100% Road
2. Next: Ex-UK 100% Air to ex-UK 100% Sea
3. Aurora: Ex- UK 100% air to Ex-UK 100% air +road
Brand 1: Mothercare

27 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Freigh
t
Costs
Stora
ge
cost

Clear
ance
cost
Freight
Costs

Desti
natio
n cost

Demu
rrage
cost
Origin
cost

Air Freight- Lead time and cost per

pallet

20 Pallet
standard
shipment

Road freight Lead time & cost per

carton

Brand 2: Next

Step 1: Understanding shipment volumes and schedule

Shipment tracker
Volume

Units

1924
CBM

1,199,
019

28 | P a g e

Vol/we
ek
37 CBM

Freight FCPU
cost
2,110,274 1.76

Consolid
ated
1539

Seperat
e
385

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Sh i
pm ent
U
A E

Kuwait

KSA

Q
a

V
olum e
tar

B ahra

in

L
eba

non

Step 2: Plan supply routes

Possible Supply

routes
Rate
Cost
Cards

understanding

3PL
Route feasibility
Intervie
Possible challenges
w

Consoliation feasibility
Shipme
nt
Market wise
breakdown
tracker

Step 3: Simulate proposed models

Shipment Options

20 ft Standard container
40 ft standard Container
40 Ft high cube container
LCL shipments
FTL Shipment
LTL Shipments

Scheduled according to
shipment data from tracker.
Freight cost calculated from
rate cards

Step 4: Analyze freight cost

Market wise freight cost

analysis

Shipment schedule in
proposed model

Freight cost per unit

Lead times

Step

5:

Recommendation

Inventory replenishment and management techniques

Order cycle and schedule

Brand 3: Aurora

29 | P a g e

Cost savings

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Part 1: Consolidation at origin

A. Collect data from supplier to check feasibility of consolidation
B. Prepare general consolidation schedule according to market and
inventory class
C. Pick-up routes for inventory Milk run pickups and back haulage
Part 2: Introducing RDC as cross docking hub
A. Freight cost per unit estimation
B. Using the most economical route

2. Group Freight Dashboard

Interview
stakeholders to
identify critical
activities

RCA to find causes

Derive KPIs and

Metrices according
to identified causes

1. Identify Critical activities: Stakeholders were interviewed to find out

how their operations are effecting the key problems stated by top
management. The critical activities were studied in detail
30 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

2. RCA: Performed root cause analysis to find out what the root cause
to track.
3. Derive KPIs & Metrics: Understand trends of the root causes to make
sensible KPIs out of them
The KPIs Metrics and representing charts were framed in a
dashboard of two pages that contains what management should
know to make decisions
Step 1: Identify critical activities

Interview top
management for
understanding key
problems

Study the process

flow of activities
associatd with key
problems

Interview the staff

associated with
activities to find key
sub-ctivities

Output:
1. the process flow of key activities that directly impact the supply chain
and are a matter of concern
2. Ground level challenges in performing key activities
3. Understanding of key sub-activities
Step 2: Root cause analysis
1.
2.
3.
4.
5.

Define the problem

Collect data
Identify possible causal factor
Identify root cause
Identify KPIs associated with the Root cause

Designing Tool for root cause analysis

Activity
database:
record of all
activities with

Rating
scheme

Modelling to
identify root
cause

3. Shipping guide
Identify shipping
activities that
effect supply chain

31 | P a g e

Study the literature

to find the best
practices

Allign activities and

recommend best
practices

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

1. Identify Critical Activities: Observe work at warehouse and yards

to identify activities
2. Study Literature: Find practices from internet and literature.
3. Recommend Best practices: Design the shipping Guide

Efficient packaging
Cost reduction through packaging

Multi stacking of pallets

MODELLING & ANALYSIS

1. Marine freight conversion
T
RATE
R
CARD
A
C
K
E
SIMULATION R

TRACKER

MODEL 1
MODEL
32 | P a IMPACT
g1
e
MODEL
2
MODEL
3
MODEL
MODEL
32
IMPACT
IMPACT

ACTUAL
SIMULATE
COSTS &
D COSTS
LT

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

The analysis was carried out to simulate actual historical volumes in

proposed model, analysis aimed at finding following
1.
2.
3.
4.
5.

Marine shipments
Consolidation
Freight costs and break down
Market wise costs
Mode wise costs

Final finding: The aggregate cost savings were around 80 %

Analysis format

Model 1
Model 2
Model 3

Frt.
Costs
X1
Y1
Z1

LT

Savings

X2
Y2
Z2

X3
Y3
Z3

Consolidat
ion
X4
Y4
Z4

Schedule
X5
Y5
Z5

Compari
son
X6
Y6
Z6

The analysis was carried out for multiple brands, the top rated three
initiatives are illustrated
Potential Savings
Potential savings are calculated by merging forecast for this year adjusted
according to deviation in quarter 1 forecast and actual value

Forecast model
Forecast for Month i = Fi
Actual shipping volumes for Month i = VolAi (i=1-4)
Adjusted forecasts for Month i = Vol i (i=5-12)

33 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Volumes - 2015
100
80
60
40
20
0

Volumes

Ei = economic trend factor for specific month (i=1-12)

Vol i = Fi X Ei X (Vol (i-1)/F(i-1)

Potential savings = FCPU saving X Summation(vol (5-12)
Analysis format
Tracker simulation

10
7
5.5

Consolidati
on
10
17
23.5

Consolida
ted
0
0
0

7.35

4.9
5.6
12.3
10.1
2.4

4.9
10.5
22.8
0
2.4

Date

Ch WT

CBM

01-01-2015
02-01-2015
03-01-2015

1670
1169
918.5
1227.4
5
818.3
935.2
2054.1
1686.7
400.8

04-01-2015
05-01-2015
06-01-2015
07-01-2015
08-01-2015
09-01-2015

na
na
na

Freight
cost
0
0
0

Origin
cost
0
0
0

30.65

545

332

0
0
0
32.9
0

na
na
na
A
na

0
0
0
545
0

0
0
0
332
0

Class

Formula
Consolidation: =IF(E57<25,D57+E56,0)
Simulating shipment: =IF(F57=0,"na",IF(F57>33,"B","A"))
Cost calculation: vlookup

Class master data

Class

34 | P a g e

Descripti
on

Origin Cost
per
wt

per
shipment

Freight cost
per
wt

per
shipment

Destination
Costs
per
per
wt
shipment

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING
A
FCL 40
0
FCL 40
B
0
HC
C
FCL 20
0
D
LCL
5.6
E
FTL 20
0
F
FTL 40
0
FTL 40
G
0
HC
H
AIR
17.3

NATIONAL INSTITUTE
160

560

1.2

122

160

560

1.2

122

120
35
120
160

0
40
0
0

480
0
350
390

1.2
1.2
1.2
1.2

98
90
98
122

160

390

1.2

122

267

213

1.2

98

Final cost analysis

Current cost details
Calculated from shipment tracker
PIVOT table on shipmen trackers

Market

Origin
Cost

Current Model
Air
Freight
Clearance
Cost
cost

UAE
KSA
Kuwait
Qatar
Egypt
Bahrain
Lebanon
Morocco
Turkey

Proposed model cost details

Calculated from simulated model
Applying pivot table to simulated model
The below shown table is comparison matrix derived from simulation

35 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE
Proposed Model

Market
UAE
KSA
Kuwait
Qatar
Egypt
Bahrain
Lebanon
Morocco
Turkey

Air
Freight
Cost
ya
Yb
Yc
Yd
Ye
Yf
Yg
Yh
yi

Origin
Cost
Xa
Xb
Xc
Xd
Xe
Xf
Xg
Xh
xi

Clearance
cost
za
Zb
Zc
Zd
Ze
Zf
Zg
Zh
zi

Origin
Cost
Xa
Xb
Xc
Xd
Xe
Xf
Xg
Xh
Xi

Road
Freight
Cost
ya
Yb
Yc
Yd
Ye
Yf
Yg
Yh
Yi

Comparison table
Comparison
Market
UAE
KSA
Kuwait
Qatar
Egypt
Bahrain
Lebanon
Morocco
Turkey

Absolute
CSa
CSb
CSc
CSd
CSe
CSf
CSg
CSh
CSi

FCPU
CSa;
CSb;
CSc;
CSd;
CSe;
CSf;
CSg;
CSh;
CSi;

CSa
CSb
CSc
CSd
CSe
CSf
CSg
CSh
CSi

CSa;
CSb;
CSc;
CSd;
CSe;
CSf;
CSg;
CSh;
CSi;

Final Summary of analysis

The cost savings and FCPU for major 3 brands

36 | P a g e

Mothercar
e

Current

Proposed

2017
Potential

Freight
Cost

$160000

$80000

$56000

FCPU

$1.1

$0.55

$0.62

Clearance
cost
Za
Zb
Zc
Zd
Ze
Zf
Zg
Zh
Zi

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Using road freight translated into 50% cost savings over air freight in
single route network.
NEXT cost savings table
Current

Proposed

2017 Potential

Freight Cost

$2 mn

$0.6 mn

$1.4 mn

FCPU

$1.76

$0.32

$1.44

The total cost savings are around 70% for supply network with ocan
freight and road freight combinations.
Aurora cost savings table
Current

Proposed

2017 Potential

Freight Cost

$1.2 Million

$0.93 Million

$0.82 Million

FCPU

$0.92

$0.72

$0.2

Aurora brand was reworked with air freight and road freight combination
The multi brand consolidation at origin and milk run pickup model also
derived cost savings of 7-10%
Total cost savings cumulated to 22%.

2. Group Freight Dashboard

37 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

Problem
Source
R
C
A

Source 1

Root
Causes

Source 2

R
C

KPIs

D
A
T
A

Metrics

Dashboard

Source 3

Root cause discovery and analysis tool

Problem Area

Generation of
costs

Select the problem

area to be evaluated

No. of activities

15

Note: fetches the no.

of associated activities
in order of rating

Result from tool

Requiremen
t

Associated
activities
Documentati
on

Generation
of costs in
time

Activities
rating

10

Data entry

Re-Routing

Causes
D/O handover
Invoice
generation
Original
documents
handover
Data input
Data correction
Re-routing
Decision
Re-routing

Cause
rating
5

Total
Rating
50

50

40

4
5

12
15

Ratings can be edited for future changes if required

Note: the tool rates all the activities according to their impact on specified
problem area and return top activities
The top rated activities are analyzed to derive KPI

38 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

KPIs Identified

Air dashboard Illustration

Regio
n

NA

Asia

Euro

3PL
Aramax
DGF
DB Schenkers
Evergreen
Allport
Aramax
DGF
DB Schenkers
Evergreen
Allport
Aramax
DGF
DB Schenkers
Evergreen
Allport

39 | P a g e

Air KPI - Origin LT

SL
April Achieved
A
5
4.5
98%
5
5.3
70%
5
7.2
72%
5
4.9
99%
5
3.4
99%
5
4
95%
4
5.1
88%
5
4.3
92%
4
5.8
78%
4
6.6
45%
5
4.3
80%
5
5.7
80%
4
5.4
65%
6
8.9
10%
5
3.4
100%

NATIONAL INSTITUTE

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

FUTURE SCOPE
1. Marine Freight Conversion
A. Cost savings power house with minimum 60 % cost saving
When shipping teams opt for marine freight it usually results in
cost savings of around 80%. Around 80% of the inventory in
fashion footwear division is continuity stock which do not require
low lead times, and can be served by inventory holding model.
If the 80% of continuity stock is identified correctly it can be
transported through economic marine routes instead of
unnecessary air freight
Seasonal stock can be kept on current model, with 20% volumes
and 80% of revenue
Thus multiple models in parallel working can drive high cost
saving with zero impact of higher lead time
B. More efficient replenishment system for Local Distribution Centre
With 80% continuity stock in inventory holding model, the
replenishment of continuity stock in stores will take very low time
as each LDC will hold inventoy according to the order cycle
C. Proposed inventory classification that may be beneficial to save
cost savings in other parallel projects
D. Brands have multiple models available that can be used
simultaneously according to need to always have most suitable
and economical mode of transporting.
2. Group Freight Dashboard
A. Overview of whole freight spent at managers fingertips
B. Ease in communicating relevant figures to other stakeholders
C. Observing early signs of failure
D. Finding improvement opportunities
E. Tracking improvement initiatives
F. Validating figures propagated by stakeholders
3. Shipping Guide
A. Educating shipping staff about best practices
B. More tools like freight calculators are proposed that will help in
following best practices
C. Interactive videos based on findings of the project can be
produced
D. The process followed in identifying best practices can be
replicated to find other solutions

LIMITATIONS
40 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

1. Marine Freight Conversion

A. Resistance to change by shipping teams
B. Resistance by brands against higher lead times.
C. Resistance against changed order cycle and inventory
management technique.
D. Increase in oil prices may mean change n calculations
E. Lowering of economy may result in lower sales then volumes
may not be sufficient for proposed models.
Even if the organization is onboard because of high cost savings, the host
brand may not be ready on pretext that late fashion will dilute their brand
image.
Consolidation is a task which require high level of coordination between
the partners, different suppliers, brands, and shipping teams of different
market are sometimes not collaborative towards common cause and
focusses to achieve their own targets.
2. Group Freight Dashboard
The dashboard reports critical measures. Lack of detail may be
misinterpreted or misrepresent the actual nature of problem
Example:
3PL

SLA

Avg. LT

Aramax
DGF
Allport
DB
Schenkers

5
5
5
5

4.9
3.2
5.1
7.9

Completio
n
100%
87%
0%
30%

No.
shipments
1
125
1
145

of

Aramax shows 100% completion because it only have 1 shipment

whereas DGF which is much better forwarder for specified route
shows 87% completion.
Allport performed with minor short lag but shows 0% completion, DB
schenkers performed worse but KPI is 30% which is better than
allport
3. Shipping Guide
With changing supply model and introduction of latest software and
technology, the tools will be obsolete and will be required to be
updated
Shipping staff may not be receptive of tools because they might be
comfortable in what they are doing already and do not want to
change their process even if the changes are minimal
41 | P a g e

M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

ACADEMIC CONTRIBUTION
During the course of internship as part of my project I was able to
experience and implement theory in practice in following areas:
1. Consolidation
To benefit from economy of scale it was required to consolidate
volumes from different suppliers as well as different delivery
schedule dates.
2. Cross-docking
Huge volumes if shipments arrived from around 1900 suppliers from
190 locations, the volumes were shipped to 10 different markets. All
the shipments were cross docked at Jabel Ali, UAE
3. Truckload Optimization
Optimizing container and truckload to derive maximum cost savings
4. Scheduling
Short Term: Scheduling various types of order and various
suppliers to make economically fit consolidating
5. Inventory Classification
Classifying seasonal and continuity inventory to plan different
supply networks if possible as different inventory require different
lead times
6. Replenishment cycle management
Complexity of replenishment depends upon different classes of
inventory,
planning
replenishment
schedule
according
to
requirement can be a power house of cost savings without lowering
service standards.
7. Inventory Control and management
Change in Lead times resulted in changed order cycle, order
quantities and safety stock
8. Designing Supply network
Multiple parallel supply networks with different modes and routes
are designed that have different costs and lead times
9. Milk run in picking up
Picking up material from different suppliers in most economical way,
Milk run model was proposed that lead to decent cost savings
without any impact on on-going operations
10.
Managing suppliers
3PLs, suppliers, clearance agents and bonded warehouses are rated
according to their performances to find the best fit of supply route,
mode, supplier, 3PL etc.

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M.H. ALSHAYA
OF INDUSTRIAL ENGINEERING

NATIONAL INSTITUTE

BIBLIOGRAPHY

Supply Chain Management: Strategy, Planning, and Operation 5 th

Edition Sunil Chopra and Peter Meindl, Pearson publication
Reducing your freight cost in roatransport, Artocle II, Canadian
Logistics journals
A maximal-space algorithm for the container loading problem F.
Parreno , R. Alvarez-Valdes , J.F. Oliveira _,
Online Paper: Deciding FCL/LCL shipment Brandon Kronitz,
operations associate at Flexport.
https://www.mindtools.com/pages/article/newTMC_80.htm
https://www.dashboardsolutions.com/keystodashboard/bgXc.htm
Motion study in packaging: research paper by Dr. Jamal Shrwan,
2012
Root Cause analysis in retail industry: Article Quality Tools Inc.
Global freight Management: Procedures and Laws 3 rd Edition, J.
Colheart and E. Williams, 2009

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